from the tapdancing dept

Back in April, a US judge pointed out that US criminal law requires serving those accused of criminal activities and Megaupload, as a foreign-based corporation, might not be subject to such service -- potentially killing the lawsuit against the company (though, not against the individuals who run the company). The Justice Department has now hit back with a filing mocking the idea that Megaupload could avoid criminal charges as a company (pdf and embedded below).

The filing focuses on how Megaupload had extensive operations in the US, including having many of its servers hosted here -- and even had two separate CEOs at various points who reside in the US (including Swizz Beatz, who the filing notes, has refused to cooperate). It further argues that there is no rush to serve the company, and that it can do so once the execs are extradited to the US -- or it can serve them at the office listed in Hong Kong. Admittedly, part of this fight is really about process technicalities, so I wouldn't make too big a deal of them. However, there are legitimate jurisdictional questions about what the standards are if the US can go after a company anywhere in the globe, just because it's online. That could certainly come back to haunt the US, as US companies are frequently targeted by other countries. Having a case like this could be used as justification to retaliate against US companies.

The filing also highlights something that is somewhat self-contradictory about the US's case. In an effort to argue US jurisdiction, the DOJ argues that Megaupload has been involved in civil lawsuits (on both sides) in the US. That is true... but that seems to weaken another contention in the DOJ's wider case: that it had to take the actions it did because Megaupload was somehow "unreachable" as an offshore "rogue site." The actual evidence, as noted by the DOJ itself in this filing, proves otherwise.

In an unusual case, a U.S. judge ruled on Wednesday that Motorola cannot enforce an injunction that would prevent Microsoft from selling Windows products in Germany, should a German court issue such an injunction next week.

So this is a US judge forbidding a company from applying an injunction that it might be awarded in Germany, by a German court. That sounds rather like one jurisdiction is interfering with another, but Microsoft apparently thinks that's reasonable:

Microsoft argued that if the judge would allow that German injunction to go forward, which ultimately might compel Microsoft to negotiate a license according to German law, the U.S. court would lose its opportunity to make its own ruling on similar licensing issues. The U.S. court should be the one to rule on that issue, Microsoft argued, because Microsoft filed its lawsuit against Motorola over the terms of a licensing deal before Motorola filed its suit in Germany.

It's striking that Microsoft isn't such a big fan of patent courts -- especially efficient ones that produce their judgments rapidly -- when it is on the receiving end of patent lawsuits, rather than the one making the threats.

It's also pretty rich that Microsoft should complain about the possibility of an injunction being granted against it by another jurisdiction when that is precisely what it is trying to do by filing an action against Motorola in the International Trade Commission as well as in a US District Court. If Microsoft says German courts shouldn't get involved in its dispute with Motorola, it's equally ridiculous that an international trade body should be dragged into a domestic dispute between two US companies, as Techdirt has noted before.

Basically, Microsoft is just whining because it thinks it's going to lose in Germany, and has gone running to the US judge in an attempt to subvert that country's judicial system. It's a huge pity that he acceded to this ridiculous request: it creates a terrible precedent that's likely to lead to more such interference in the legal systems of other countries -- including foreign courts ordering companies not to obey US rulings -- and a general weakening of respect for the rule of law around the world.

"This unfairness harms the affected companies and their employees, as well as consumers and the broader economy," the senators wrote. "It also stifles innovation by forcing law-abiding American businesses — large and small — to compete against those businesses that reduce their operating costs through the use of pirated IT."

Except that much of that is misleading. First of all, it's unclear that the companies in question would have bought the software otherwise, so arguing that it impacts the software companies isn't necessarily true. It is true that US companies have to compete against those other companies, but is the cost of the software they're using really the difference maker here? Besides, for all types of software there is growing competition from open source alternatives. If US companies want to compete, why not adopt more open source alternatives?

Also, what exactly do these Senators think the FTC can do here? The FTC has no jurisdiction over foreign companies and how they operate at home. Finally, even if the FTC could magically stop these companies from using unauthorized software, the end result is likely that those companies would simply shift to alternatives, such as open source software themselves.

from the the-internet-is-global dept

For years we've talked about the challenges a global internet creates for legal questions that are based on more limited jurisdictions. As different countries start to deal with this, there has been some fragmenting of a global internet in the form of country-wide censorship, such as those seen in the Great Firewall of China. However, what's to stop it from fragmenting further and further? Eric Goldman points me to a recent academic paper arguing that US courts could start enforcing local obscenity laws on the internet by use of geotargeting. As you probably know, disseminating obscenity is illegal in the US, but the "know it when I see it" rule for determining what is "obscene" has generally focused on "community standards." For the most part, that's meant "local" community standards. That works (somewhat) when you're talking about physical distribution and you can try to determine the local community. But on a global internet? As the paper notes, the Supreme Court has mostly punted on this issue. However, the paper suggests that a solution could be to use geotargeting to re-establish local boundaries, jurisdictions and community standards on a global internet:

The line between obscenity and eroticism is hard to pinpoint, and varies from community to community. In general, the process of analyzing whether a work is obscene includes asking whether the content violates the community standards of the local geographic area where the material was published. Thus, for most media, publishers of potentially obscene content must choose the communities into which they publish, or face criminal charges from the least tolerant communities. But for online media, the Supreme Court remains undecided whether the obscenity analysis should use the local community standard. The Court’s doubts stem from the Internet’s global reach and lack of control over who receives free online content. For example, if a work is nationally-available online, and is judged using the same legal standard as in other traditional media, any local community offended by the content has the power of a heckler’s veto to make the publisher liable for distributing obscenity.

This Article explains why the use of a new online technology resolves the question of whether local community standards should be used to judge online content. Called geotargeting, the technology creates borders on the previously borderless Internet, which allows publishers to specifically target geographically localized communities, thereby excluding areas where the material might lead to criminal charges. This new power to publish potentially obscene materials only to selected communities drastically reduces the constitutional concerns of applying traditional obscenity law to online content.

There are a number of problems I can see with this approach -- some of which are addressed in the paper. However, what troubles me more is the larger issue. There's nothing that says this kind of approach needs to be limited to obscenity. Focusing on something like this opens up a fragmented internet ruled by local jurisdictions, where suddenly all sorts of geotargeting requirements start popping up to create a patchwork censorship regime down to very localized regions.

Many of us consider the global nature of the internet a feature rather than a problem. It allows people stuck in regressive communities to access the outside world and find out that their "community norms" may not be what's considered normal elsewhere. An approach that looks to open up censorship on local standards by use of geotargeting, while unlikely to be effective for those who really do wish to get around it, would almost certainly cause problems for those who have legitimate reasons to reach out beyond their local community.

from the sad dept

In January, a judge said that the UK could extradite student Richard O'Dwyer to the US to face criminal copyright infringement charges for the "crime" of linking to streaming videos hosted elsewhere -- something that had already been found legal in the UK multiple times. This is pretty important, because for it to be criminal infringement, it has to be willful, and if sites that were nearly identical to O'Dwyer's TVShack.net were found legal in his home country, where he lived and where he operated the site, it's difficult to see how there's anything willful at all.

Furthermore, since he's only linking there isn't direct infringement, only the possibility of secondary infringement. Now, there are aiding and abetting laws, but it would have to be aiding and abetting of criminal copyright infringement and that would require the users of TVShack to be guilty of criminal infringement -- meaning that they were profiting from willful infringement. And that doesn't seem likely either. There are so many holes in the case it's difficult to understand why ICE and DHS are ruining the life of a UK student with no clear legal basis.

Either way, as the UK government continues to kowtow to the US entertainment industry, the Secretary of State has taken the court's initial okay and approved the extradition. This is really damning for the UK government. Given the growing concerns about the overreach of the entertainment industry to take away basic freedoms, sending Richard O'Dwyer across the Atlantic on bogus charges just so the MPAA can stick his head on a pike somewhere isn't going to go over very well.

from the this-has-been-happening-for-a-while dept

After the US seized Bodog.com, we pointed to a writeup by EasyDNS that has created quite a stir, claiming that this was the first time that the US had seized a domain that was registered through a non-US registrar by going straight to the register (in this case VeriSign). But as we pointed out, that's simply untrue. Back in 2010 we wrote about how most of the federal government's domain seizures went directly to the register.

For whatever reason, more and more people keep picking up on the EasyDNS piece, including interesting questions about whether or not these seizures could be seen as declarations of war by seizing foreign property.

I'm glad that people are up in arms about this, but it's important to remember that this simply isn't new. In fact, the feds themselves seem bewildered by all these claims. In an interview with Wired, ICE spokesperson Nicole Navas admits that the government has seized approximately 750 domains this way, with the vast majority of them using foreign registrars:

Such seizures are becoming commonplace under the Obama administration. For example, the U.S. government program known as Operation in Our Sites acquires federal court orders to shutter sites it believes are hawking counterfeited goods, illegal sports streams and unauthorized movies and music. Navas said the U.S. government has seized 750 domain names, “most with foreign-based registrars.”

So, sure, speak up about this, but please, please recognize that this isn't new. It's been going on for at least three years. Hell, it's so common these days that PIR, who runs the .org register, has a dedicated page listing out all the domains they've handed over to the feds.

from the trouble-ahead dept

Since SOPA and PIPA are US bills, the focus has naturally been on the US response to them – notably in the list of major sites that participated in the blackout, or who have otherwise protested against the proposed legislation. But it's important to remember that the whole rationale of these new laws is tackling copyright infringement outside the US.

The European Parliament, in its joint motion for a resolution on the EU-US Summit of 28 November 2011, objects the proposed legislation by stating:

"Stresses the need to protect the integrity of the global internet and freedom of communication by refraining from unilateral measures to revoke IP addresses or domain names;"

The joint statement (pdf) of that Summit had the following section about the Internet:

We share a commitment to a single, global Internet, and will resist unilateral efforts to weaken the security, reliability, or independence of its operations — recognizing that respect for fundamental freedoms online, and joint efforts to strengthen security, are
mutually reinforcing.

SOPA and PIPA threaten to cut right across that commitment.

Most of the letter goes over the by-now fairly well-known deficits of the bills, but also points out a particular issue for Europe:

Companies wishing to offer online services will be forced to monitor all communication on their platforms and filter anything which could possibly be an infringement of IPR. The methods of monitoring would almost certainly challenge people's fundamental rights. Considering the world wide character of the internet, European companies will be forced to adhere to US standards to prevent DNS blocking. Article 15 of the European E-Commerce Directive prohibits obligations for the general monitoring of their services. The European Court of Justice has recently ruled in the Scarlet/SABAM case that monitoring and filtering of communication online is a breach of fundamental rights such as privacy, freedom of communication and freedom of information and should not be applied to halt infringements of IPR.

It's not clear how that clash between jurisdictions would be resolved: if online services in Europe monitor all communications, they will be breaching European law; if they don't, they may run foul of SOPA/PIPA. Inevitable legal incompatibilities between the two jurisdictions are also hinted at at the close of the letter:

Concluding, SOPA and PROTECT IP will create tensions across the Atlantic in a time where we need to work more closely together. We ask you to vote against SOPA and PROTECT IP and to work with us on effective laws, which enable a fair remuneration of artists and creators online, without violating fundamental rights or fragmenting the free and open internet as we know it. We also believe in close cooperation in promoting internet freedom world wide, in line with our foreign policy objectives.

"While we acknowledge the importance of combating illegal content online, the means to achieve this objective must be effective, proportionate and preserve the advantages of an open Internet. We expect the extra-territorial impacts of any US legislation would be minimised."

from the scary-scary-stuff dept

Want to understand just how insane things may get under SOPA/PIPA? Just take a look at what's already happening under today's laws. Back in 2010, one of the first websites that Homeland Security's ICE (Immigrations & Customs Enforcement) group seized was TVShack.net. TVShack was a site that collected links to TV shows. Certainly, many of those shows were likely to be infringing -- but TVShack did not host the content at all, it merely linked to it. Richard O'Dwyer, the guy who ran the site, was a student building an interesting project over in the UK. However, the US Department of Justice decided that he was not only a hardened criminal, but one who needed to be tried on US soil. Thus, it began extradition procedures. Even worse, nearly identical sites in the UK had already been found legal multiple times -- with the court noting that having links to some infringing content was certainly not criminal copyright infringement. That makes things even more ridiculous, because extradition is only supposed to be allowed for activities that are criminal in both the US and the UK.

But, seriously, think about how insane this is. With all the problems in the world, the US was spending time trying to extradite a UK student to the US, because he set up a site that had links to some infringing material. Is this really the best use of US law enforcement's time?

District Judge Purdy said in his ruling: "There are said to be direct consequences of criminal activity by Richard O'Dwyer in the USA albeit by him never leaving the north of England.

"Such a state of affairs does not demand a trial here if the competent UK authorities decline to act and does, in my judgment, permit one in the USA."

He added: "I reject all challenges advanced to this request. No bars or other challenge being raised or found, I send the case to the Secretary of State."

O'Dwyer can and almost certainly will appeal this decision. But this is just ridiculous. And this is under existing laws. Just think what happens under SOPA/PIPA -- which are even more targeted at foreign sites. Do we really want the US government going around the world, dragging kids from their homes and taking them back to the US to throw them in jail... because they set up a web page with some links on it?

from the jurisdictional-mess dept

Facebook sued Pedersen and Retro Invent, who are based in Norway and run the "Faceporn" site. "Faceporn" is a website which features pornographic content and "allows its users to create profiles, join groups, upload photos and video, and conduct live chats." Facebook served Retro Invent using the Hague Convention, and moved for default judgment.

The court, on its own motion, raises the issue of personal jurisdiction, and orders Facebook to show cause why the lawsuit should not be dismissed for lack of personal jurisdiction. Facebook argued in its filings that Faceporn targets a United States audience by using a ".com" address, and by virtue of the fact that Faceporn is an interactive website with 250 users in California and 1000 users in the United States. The court says that these allegations alone are not sufficient to satisfy the standard for personal jurisdiction:

not all material placed on the Internet is, solely by virtue of its universal accessibility, expressly aimed at every state in which it is accessed.

Given the numerous foreign regulators who are taking aim at Facebook, it seems foolhardy for Facebook to argue that use of a TLD along with local registered users confers jurisdiction in a foreign country. Perhaps this argument won't directly tag Facebook because it is already subject to jurisdiction in every country where it uses the TLD, but it's not a great precedent for other internet companies. I'm somewhat surprised Facebook made this argument. Clearly, it's not an internet start-up any more.

from the jurisdictional-issues dept

We've been quite critical of some of porn company Liberty Media's copyright trolling efforts, in which the company is using what we believe to be questionable legal theories to pressure people into paying up. We still find it interesting that the lawyer for Liberty Media, Marc Randazza, is also the main lawyer who has been putting so much pressure on Righthaven in many of its cases. Marc continues to see the two situations as quite different, but to us they still seem to be the same basic situation: using broad copyright claims, with sometimes questionable evidence, against individuals -- for whom the threat of statutory damages could be crippling. In some ways, Liberty Media's efforts could be seen as worse than Righthaven's, because as a gay porn producer, anyone they threaten who is not publicly "out," may feel a much, much stronger threat, as being named in such a lawsuit may effectively out what they considered to be private information about their sexual interests.

Either way, it appears that Randazza and Liberty have been getting enough info on IP addresses to file lawsuits against named defendants rather than just John Does, but one of the big issues in these lawsuits has been the jurisdictional question. Suing someone far away from their home makes a lawsuit even more challenging, and potentially makes them more willing to just settle up, even if they're innocent. Many previous court rulings have suggested that, for activities online, plaintiffs can't just assume that their home turf is the proper jurisdiction, because they have to show actual harm in that jurisdiction. In fact, we were a bit surprised and disappointed earlier this year, when a ruling in NY seemed to go against that precedent and suggest that a copyright holder could sue anyone on its home turf. Of course, that ruling only applies to NY.

In one of Liberty Media's filings -- which was done on Liberty's home field in California -- a defendant asked for dismissal for lack of jurisdiction, which the court has granted, dismissing the case. Liberty argued that because it was in California, and the defendant knew that the company was in California, any file sharing was enough to show harm in California. The court didn't buy it. In part, some of the problems were specific. Liberty pointed to the terms and conditions on its website (of which the defendant had been a member), but the court points out that nothing in this case seemed to involve the website. The content was claimed to have come from a DVD, rather than the website. The court also notes that there doesn't appear to be any conduct by the defendant expressly aimed at California, and points out that "mere web presence is insufficient to establish personal jurisdiction."

Thus the case was dismissed for lack of personal jurisdiction. Of course, the court left room to amend the complaint, and Randazza has indicated that he intends to do just that, with enough info to establish the personal jurisdiction in California.